JK Tyre to Expand China Outsourcing

JK Tyres has become the latest Indian manufacturer to talk of boosting its outsourcing of production to Chinese manufacturers. An article printed in the Hindu Business Line reports that the company, who already has five or six Chinese partners producing tyres under the JK brand name, intends to increase its outsourcing activity there by around 10 per cent.

This measure is being taken in order to increase JK Tyre’s sales in Chinese and other overseas markets. “We are looking at strategic partners in South East Asia or China to serve the local market in those countries as well as overseas markets. Though the China business is miniscule currently, we are looking to expand it,” quoted the Hindu Business Line of JK Tyre vice chairman and managing director Raghupati Singhania.

Last year, the company outsourced business worth £8 million. At present, China accounts for 15 per cent of the company’s global business and plans are to increase this level to one quarter. India’s domestic industry is already experiencing difficulties competing with Chinese manufacturers, whose products are on average about 25 to 30 per cent cheaper. It is to take advantage of this cost differential, plus the infrastructure the region offers, that the company is looking at expanding its capacity overseas, added Mr. Singhania.